Entering a Voluntary Payment Plan with Your Creditor After Being Served with a Lawsuit May Not Be Your Best Solution

The pandemic has caused financial turmoil for many people.  Many Pennsylvanians find themselves behind on payments whether it be on their credit cards, personal loans, medical bills, or with their mortgage company.  As Pennsylvania re-opens and recovers from the pandemic, creditors will continue collection efforts to take advantage of consumers who have found themselves hurting financially.  Individual saving has reached an all-time high, but that does not mean an individual should use that money to enter a voluntary payment plan with the creditor.  Gas prices are on the rise and the cost of goods are increasing and that money may be needed for necessities in the future.  

Creditors are trying to capitalize on the government economic impact payments or commonly referred to as stimulus payments.  Their hope is that their continued collection efforts lead to you, the consumer, entering a payment plan with them.  The creditor may continue to call you, send letters, or do anything else possible to get you to contact them.  The last step they take is filing the lawsuit against you.  Many people get served with this lawsuit and call the creditor to enter a voluntary payment plan.  These payment plans typically are for a small dollar amount per month for a large number of months until the amount owed is paid in full.

For instance, someone allegedly owes $6,000 dollars to their credit card company.  They receive a lawsuit seeking to recover that amount of money.  A consumer calls the credit card company and says they can make $100 a month payments.  The credit card company says that is fine we will secure the settlement amount with a consent judgment, and you can make your $100 dollar a month payment until the $6,000 dollars is paid in full.  Many consumers are happy to take care of the immediate problem by only paying $100 a month.  The consumer does not realize they will be making that payment as part of their monthly budget for five years!  Should something happen in that time frame and a payment is missed, then the creditor will have a judgment against the consumer.  This judgment could lead to attempting to garnish a bank account and/or seizing the individual’s assets as well as having a lien against any property owned.   

Voluntary payments to creditors seem like a good solution.  However, they are only a short-term solution.  Consumers usually end up paying back a lot more than they should.  If you hire Harold Shepley & Associates, then you have experienced attorneys to effectively handle your financial situation.  We work to obtain the best deal possible for you and save you a significant amount of money.  Most importantly, we offer a long-term solution to a consumer’s financial situation in a time frame that works for the consumer.  If you find yourself needing help financially, call Harold Shepley & Associates.  We can evaluate your circumstances and advise you on the best course of action to save you the most money to help you reach a long-term solution.  Call our office today for a FREE consultation at 1-877-827-9006.

The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information, content and materials available in this article are for general information purposes only.  No attorney-client relationship is established between the reader, user or browser and the website owner, author contributors, or respective law firm employees by using, viewing, browsing, or clicking on the link to this article or related links. 

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Ginger Nicklow

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